JUNE 23, 1997

Tobacco settlement bad news for motorsport

THE deal struck last week in Washington DC between the tobacco industry and American state negotiators is likely to mean the end of cigarette sponsorship in the United States. The deal includes a ban on sporting sponsorships, an admission from the tobacco industry that tobacco is additive, the payment of $368bn over the next 25 years, the payment of penalties if youth smoking is not reduced and the funding of programs to help smokers quit the habit.

In exchange the tobacco companies will be granted immunity from lawsuits both from individuals and from state governments which are trying to recoup the costs of treating those with tobacco-related illnesses.

The deal does not include lawsuits against US tobacco companies filed in non-US courts by foreign nationals. Anti-smoking activists had been campaigning for a global code of conduct, arguing that restrictions in the US would simply push the tobacco companies into developing new markets elsewhere.

The deal will not become law for some time - if at all - because it must first be agreed by both the US Senate and the House of Representatives and then by the White House.

If the agreement goes ahead unchanged it will have a dramatic effect on American racing, particularly at lower levels of the sport, where tobacco companies have long played an important role. It will also make it less likely that Grand Prix racing will be willing to visit the United States.

Tobacco money has played an important role in the growth of NASCAR racing (with the Winston brand in particular) and in CART four teams rely heavily on tobacco sponsorship: Team Penske (Marlboro), PacWest (Hollywood), Team Green (Kool) and Forsythe Racing (Players).